Relationship Marketing: What It Is And Why You Need It

It seems that every year a new handful of hyped up marketing techniques become the latest craze. That is in addition to older classics of the web such as SEO, which are still a staple today despite the changes made in search engines to curtail abuse in the area. In the end, it is best to keep a fair share of these methods brewing at once to give you the best overall results possible.

But one has never stopped being true, even if for some companies it went out of style: the customer is always right. Or, more specifically, customer satisfaction for loyalty building.

It is as true today as it ever was that getting a new customer is about ten times more costly than keeping one that you have already sold to. What you might not know is that it goes beyond that. It is also less important to make a sale than it is to ensure the happiness of that customer.

This is what we refer to as relationship marketing, and it is really what it sounds like: fostering a relationship with each consumer to ensure they are satisfied with the service they are being provided. Focusing on this element, it has been shown to increase profit by generating brand loyalty, an important part of any business model.

The main problem that companies seem to have lately is forgetting this principle. With so much competition thanks to the Internet â€“ both a blessing and a curse for the sales world â€“ there is too much focus on sale by sale transactions. Many think that just offering a small discount once in awhile is enough to bring people back. But this is wrong, and it ends up costing the company a lot more in the long run.

What you want is establish yourself as the brand of choice. This means making sure that each customer chooses to return for more in the future, and that is where relationship marketing comes in to play.

Unfortunately, if you are reading this now, you are probably not getting the most out of the method that you could be. In fact, you might be doing the opposite and ruining your chances. Here are some ways that you can increase your odds of properly utilizing relationship marketing for your business.

Business Transparency Is Not Necessary…Usually

Let’s say you run a multi-billion dollar organization that has dominated the business world. With the current anger over the bail outs, executive bonuses in the financial sector and an increased interest in corporate responsibility, transparency is a good idea. It will help to show customers that yours is a positive business where they can buy in confidence.

But if you are a small or mid-range business with no political ties, chances are it is unnecessary. In fact, transparency might just work against you. It might be interesting (and for some, infuriating) to see how much a Wall Street tycoon makes in a year, yes. Though it is doubtful that your meager or average salary will generate much interest.

Social Networking For Updates, Not Intercommunication

You will never be able to convince me that social networking like Twitter and Facebook (especially the latter) are not brilliant marketing platforms. There is endless potential for generating interest and keeping consumers informed of upcoming products, changes, and of course offering special discounts for those loyal enough to join your page.

But when it comes down to it, many businesses make a misstep here and use it as a chat platform. The only communication you should have is official; handling complaints, taking suggestions and providing details. Anything else is too easily misconstrued. Not to mention pointless, because who actually wants to have a conversation with a business? That is what customer service is for, and no one actually relishes calling it.

Don’t Think Of It As a Relationship, Even A Business One

Yes, it has ‘relationship’ in the name. But really what you are focusing on is building brand loyalty, which is all about the history the customer has had with your company. Which is what you need to set your eye on: how often they have bought, how they plan to buy in the future, and how you can increase the odds of that happening.

Fostering a professional relationship to this end is important, but it should not be overly personal. Which is the same mistake made with social media sites mentioned above.

In the end, the whole point is to make it so they want to come back for a long term customer relationship. Not to be buddies.

Conclusion

Alright, so this is your ultimate goal: to get the customer to keep buying. Not to buy once and walk away. Not to get five people to buy once and then walk away. But to get that one person to keep buying every time they need that item, and then do the same with the next customer, and the next. That is relationship marketing: focusing on this goal rather than just on sales alone.

After all, you could sell to a dozen people easily enough. But then you would have to find another dozen people, and then another, and it would just keep going on. Wouldn’t it be better if with each dozen, you have a constant sales pool generating new profits on a regular basis?

Personal touches are good, and they make people feel like sticking around. Making it about them is the best way to go about it, by showing each one that they are more than a number of a dollar sign. Just don’t get too hung up with the personal aspect, as it should still be more about the marketing and less about being friends with the customer.

All you have to do is show them that you are the best, and you’re golden.

Annie is a business blogger for Life Insurance Finder, the free source of insurance-related information for Australians